Senate Aging Committee Chairman Susan Collins (R-Maine) is close to getting a full Senate vote on an elder fraud measure that's been one of her panel's priorities for the last three years.
The legislation (S. 223) has been folded into the banking regulation bill (S. 2155) being considered in the Senate.
The Collins provision would protect from lawsuits financial institutions and employees that blow the whistle when they suspect an elderly customer could be the victim of a scam, for example when an individual withdraws money to pay a thief posing as a tax collector or an imposter who pretends to be seeking help for a grandchild in trouble. Without legal protection, bank personnel or investment advisers could be sued for disclosing personal information.
Covered institutions—which include credit unions, insurance agencies, banks, investment advisers, and broker-dealers—wouldn't be liable if the employee had received training on how to identify and report financial exploitation of seniors.
Collins said objections from Sen. Elizabeth Warren (D-Mass.) helped stall an earlier version of the scam-liability legislation, (S. 2216 in the 114th Congress).
“She has been unfortunately the person who prevented it from becoming law in the last Congress,” Collins said. “We've had many discussions and we certainly agree on the need to protect seniors, but she just was opposed to giving any kind of liability protection. The problem is, if you don't provide liability protection, then the bank employees and credit union employees are not going to take the risk of questioning the transaction.”
Warren argued against the provision when the Senate Banking, Housing, and Urban Affairs Committee marked up the larger banking bill in December.
“My concern is the current language of this bill is improperly drafted so that banks could use it to create immunity for themselves that far exceeds the intent of this provision,” Warren said during the markup.
She said she favored “protecting banks when they advise seniors, and not creating a massive loophole that lets banks get off the hook for unrelated violations.”
Warren offered an amendment that would have limited the immunity. Committee members from both parties voted to reject it, 7-16.
The bill is the largest congressional overhaul of the Dodd-Frank Act, which was enacted to contain financial risk during the recession and enforced oversight and regulatory rules on lenders. Warren spoke on the Senate floor last week, proposing 17 amendments to the bill that she says erodes consumer protections. One of those amendments (no. 2054) is identical to the limited immunity amendment rejected by the Banking Committee.
The Senate is scheduled to vote March 12 on whether to limit debate on changes to the bill proposed by Banking Chairman Michael Crapo (R-Idaho). Limiting debate, or invoking cloture, requires 60 votes. Crapo will need the support of Democrats to clear that procedural hurdle. The Senate ended its last workweek without an agreement on moving ahead with other amendments.
The House-passed version of legislation to roll back banking regulations (H.R. 10) contains a different “senior safe” provision that would extend liability protection to state attorneys general and securities transfer agents.
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) has said that if the Senate passes the banking bill, the House probably would amend it to match H.R. 10 and request a conference.
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